The patent ‘troll’ fables of the automobile industry
The “troll” narrative of Nakajima and Snow will have us believe that any patent lawsuit to resolve a dispute constitutes abusive litigation. Economic folklore devoid of scale and proportion should not mislead this blog’s readers. First, even if one takes at face value Nakajima’s “six to seven figure” cost for settling per suit, those costs amounted to about $100 million in 2014. This is less than 0.01% of the $1.1 trillion in U.S. automobile sales in 2014, hardly a “serious drain on the automobile industry.” The growth in number of suits may simply be a result of the automotive industry shifting from traditional incremental improvement into adoption of new technologies developed outside that industry such as radar, sensors, navigation, video imaging, smart displays, batteries, electric propulsion, and computer-controlled systems. Second, we have shown that allegations that the Selden patent litigation “stifled the infant automobile industry” are false. We do so in-depth elsewhere by marshalling historical empirical evidence from primary sources in our article The “Overly-broad” Selden patent, Henry Ford and Development in the Early US Automobile Industry.